What is the Regulatory Investment Test for Transmission (RIT-T)?

The RIT-T is the cost-benefit analysis that Powerlink and other transmission network service providers carry out to ensure electricity solutions are delivered at the highest net benefit to the electricity market, or at the lowest long run cost to consumers.

Why does Powerlink need to go through the RIT-T process?

As a regulated monopoly business, Powerlink is obligated (under the Electricity Act 1994, National Electricity Law and the National Electricity Rules) to ensure its high-voltage electricity transmission network can reliably and economically meet existing and future electricity demand.

The application of the RIT-T ensures the recommended solution is the most economic option to meet reliability standards.

Does the RIT-T involve consultation with industry participants?

Under the National Electricity Rules, if the most expensive technically and economically feasible option to address the identified transmission network need is more than a certain threshold (currently $6 million), Powerlink is required to consult with registered participants, AEMO and interested parties regarding the application of the RIT-T.

In addition, under the National Electricity Rules, where transmission investment is required to address distribution network needs, Powerlink and the relevant Distribution Network Service Provider are required to consult with registered participants, AEMO and interested parties through the application of either the RIT-T or Regulatory Investment Test for Distribution (RIT-D).

What consultation does Powerlink undertake as part of the Regulatory Investment Test for Transmission (RIT-T)?

Where the most expensive technically and economically feasible option to address the identified transmission network need is more than a certain threshold (currently $6 million), Powerlink is obligated to undertake a three-stage consultation process involving a Project Specification Consultation Report, a Project Assessment Draft Report, and a Project Assessment Conclusions Report. Sometimes an Assessment Report (Stage two) does not have to be prepared.
This happens when the cost of the preferred option identified in the
Consultation Report is less than $41 million and has no material market
benefits. In these instances, feedback and advice on the Consultation Report is
addressed in the Conclusions Report (Stage three).

Who are Interested Parties?

Interested Parties are individuals or representatives who AEMO determines have an
interest in network planning and development activities. For example, a large
industrial customer may be able to help provide a solution such as reducing
electricity use during times of peak demand. Such a solution (called a
non-network solution) may defer or negate the need to replace an asset or build
new network, and must also ensure the network continues to have the capability
to deliver a reliable supply of electricity.